To achieve the recast Energy Performance of Buildings Directive targets and overcome slow, costly on-site renovation practices, off-site prefabrication is vital, yet existing research often neglects real-world applicability and circularity constraints. This study presents a systematic market mapping and a three-category taxonomy—Single-function envelopes, Multifunctional integrated systems, and Stand-alone installations—of prefabricated European renovation solutions. Applying a structured three-step protocol screening literature, industry reports, and EU projects, technologies were evaluated through a multidimensional framework capturing maturity, functional integration, structural constraints, and circularity indicators. Results reveal a strongly polarized market where passive envelope systems dominate, while multifunctional integrated solutions remain confined to prototype stages. Furthermore, most systems target low-to-mid-rise residential buildings, show limited compatibility with complex geometries, and exhibit underdeveloped circularity due to conventional material reliance. This study concludes that bridging the research-to-market gap requires system interface standardization, demand stimulation through Green Public Procurement, and regulatory adaptation for increased envelope thickness. Ultimately, this taxonomy provides an operational assessment framework and establishes a rigorous foundation for a future quantitative Prefabrication Readiness Index (PRI).